Landlord Zone Forums And Possible 40% Cgt

[Ah-so]

islandgirl on the forum adds her thoughts:

"Because? LL provide housing because our beloved Tories sold off all the council houses...if they buy a house and sell it again why should the state make an enormous profit? The LL has taken the risks - investments, as we are always told, can go up as well as down."

She starts off with the absurd argument of the LL as provider of social housing (where would we be without teachers, nurses and private landlords?).

Then she makes the "entrepreneur" argument: "The LL has taken the risks" without recognising that changes to CGT is one of the risks that a landlord takes on when depriving others of the chance to own their home.

[buzzardo]

Yup. Thought so.

In the 48 hours before the election, 'Turdo was ten-a-penny with his/her "haha, you'll be laughing on the other side of your face when NuLabia get back in...." cr@p

Bit slower on the old smart-@rse ripostes these days, eh KnobblyDustbinBoy?!

C'mon 'Turdo....

I can see you're lurking.

How come such reticence? After all, your posting rights were restricted just before the election. (at least according to posts from you and Bruce Banner (IIRC)) because you were posting cr@p at the rate of one pro-Labour post per minute.

Still waiting. Shall we have some more tumbleweed to keep us company in the interim?

[Tiger Woods?]

what alod of garbage.

How is 60% of a gain "very little"?

tim,

Yes, especially when they have been receiving rent all the time as well.

Oh? The rent didn't cover your IO mortgage you say? Well that was a silly business decision wasn't it...

Seriously, it is hilarious what these people write. "I'm not going to be able to retire in luxury because I won't get the full windfall benefits I was expecting." etc. etc.

[ChumpusRex]

In any year OH earns a salary which, as you point out isn't all taxed at 40%, but is subject to income tax. He can't offset that tax against any of his 'work expenses' i.e. getting to work.

Of course expenses can be offset against tax - but they have to be genuine expenses that there is no way to avoid. E.g. If you provide your own tools for work, then you can claim the tax back. If you have to launder your work overalls at home, you can claim a laundry allowance. If you have to have professional indemnity insurance, or some other special certificate e.g. Gas fitting CORGI certificate) you can claim the cost of that.

You can't claim the cost of discretionary things. If you commute to work, you can't claim the cost of that, as you choose to commute - instead of walk or live closer to work.

With the exception of the 18% CGT rate, there aren't really any genuine tax breaks for BTL, and possibly the 'wear and tear' allowance - but it's not much of a break as it has to cover all the costs such as furniture, redecorating and appliance replacement/maintenance.

[TalkingSense]

Wake Up to Money on Radio5 0540AM are discussing the 40% CGT for BTLs.

Looks like the new govt recognise the problems second homes create for communities all over the UK.

Their thinking seems to be that if you have a second home and don't put it to use for he local community then expect to get clobbered.

Also the 18 month "amnesty" is designed to get the housing market moving again.

What a welcome breath of fresh and enlightened thinking.

[Guest absolutezero]

C'mon 'Turdo....

I can see you're lurking.

How come such reticence? After all, your posting rights were restricted just before the election. (at least according to posts from you and Bruce Banner (IIRC)) because you were posting cr@p at the rate of one pro-Labour post per minute.

Still waiting. Shall we have some more tumbleweed to keep us company in the interim?

Are you talking to me?

You will laugh on the other side of your faces.

You didn't get a Tory government.

The worst of the Thatcherism is being tempered by the Lib Dems.

Even Cameron has made noises about moving towards the left.

The Tories now are not quite the same as they were in the 80s. They're still awful though.

I'm just waiting for all hell to break loose. Which it will.

[Topher Bear]

Wake Up to Money on Radio5 0540AM are discussing the 40% CGT for BTLs.

Looks like the new govt recognise the problems second homes create for communities all over the UK.

Their thinking seems to be that if you have a second home and don't put it to use for he local community then expect to get clobbered.

Also the 18 month "amnesty" is designed to get the housing market moving again.

What a welcome breath of fresh and enlightened thinking.

Not able to listen to that, can you summarise the main points being made by the government rep? What is this 18 month amnesty?

Thanks

[TalkingSense]

Not able to listen to that, can you summarise the main points being made by the government rep? What is this 18 month amnesty?

Thanks

From memory the amnesty is really a delay in introduction of the tax, in order to give the properdee investors time to "offer their properties to market at realistic prices". There really does seem to be a recognition that prices are too high, and this is one way to allow FTBs back into the market.

[shitfly]

Bump - not just for the thread itself but also for Ayatollah's excellent MP letter.

Should this not be pinned?

[lulu]

Of course expenses can be offset against tax - but they have to be genuine expenses that there is no way to avoid. E.g. If you provide your own tools for work, then you can claim the tax back. If you have to launder your work overalls at home, you can claim a laundry allowance. If you have to have professional indemnity insurance, or some other special certificate e.g. Gas fitting CORGI certificate) you can claim the cost of that.

You can't claim the cost of discretionary things. If you commute to work, you can't claim the cost of that, as you choose to commute - instead of walk or live closer to work.

With the exception of the 18% CGT rate, there aren't really any genuine tax breaks for BTL, and possibly the 'wear and tear' allowance - but it's not much of a break as it has to cover all the costs such as furniture, redecorating and appliance replacement/maintenance.

But ouf course you get a double whammy on that as not only do you bribe your unlucky tenent to pay over the odds to replace the fleabitten old sofa they spilt their tea on but then get to reclaim the money to buy yourself a lovely new sofa which you then keep and leave the fleabitten one in the house for the next mugs you get in to pay your mortgage.

[THE BALD MAN]

Of course expenses can be offset against tax - but they have to be genuine expenses that there is no way to avoid. E.g. If you provide your own tools for work, then you can claim the tax back. If you have to launder your work overalls at home, you can claim a laundry allowance. If you have to have professional indemnity insurance, or some other special certificate e.g. Gas fitting CORGI certificate) you can claim the cost of that.

You can't claim the cost of discretionary things. If you commute to work, you can't claim the cost of that, as you choose to commute - instead of walk or live closer to work.

With the exception of the 18% CGT rate, there aren't really any genuine tax breaks for BTL, and possibly the 'wear and tear' allowance - but it's not much of a break as it has to cover all the costs such as furniture, redecorating and appliance replacement/maintenance.

The tax break for BTL is allowing full deduction for interest payments. A policy decision would be to restict this to say 40-50% of asset value..FTBs get no tax relief on interest payments...

[buzzardo]

Are you talking to me?

You will laugh on the other side of your faces.

You didn't get a Tory government.

The worst of the Thatcherism is being tempered by the Lib Dems.

Even Cameron has made noises about moving towards the left.

The Tories now are not quite the same as they were in the 80s. They're still awful though.

I'm just waiting for all hell to break loose. Which it will.

Oh, I see...

Before the election, we were going to be laughing on the other side of our faces, when NuLabia got back in.. yadda yadda...

NOW, we'll be laughing on the other side of our faces (at some future date,) because that DIDN'T happen.

Blow me, you've got a lot of time to think up rubbish to post, in between physics lessons, haven't you?!

FWIW, I think this current arrangement is cool. The worst possible option would have been the Tories in with a majority, getting all the blame for cutting out all the public sector non-jobs and benefit-swilling chavs, and then some other mob (I know you claim you ain't Labour, so I won't fall into the trap of allowing that as a diversion,) getting back in and pis$ing our kids' futures up the wall, to keep you in baggy-bum cords and "clever" hubris.

So, as far as I'm concerned this is a mighty fine coalition. The Tories and LibDems will BOTH play much harder ball, with someone else to share the blame with - and you and yours are still toast. Many of us thought the Tories might throw the election, because they didn't want to have to clear up Brown's steaming turds, but this way everyone has won (well, everyone except said benefit-swilling chavs and public sector troughers, but I hear no crocodile tears for them. Anywhere. Except of course in Chateau Self-Pity)

Maybe that's why you've been rather quieter on here recently; could it be you've realised that you now have to demonstrate your worth, by some hard work (you know, the stuff that's "work" - and sometimes "hard" as well) like a private sector employee, and also realise that ol' sense of mega-entitlement ain't worth diddlysquat anymore?!

Works for me, KnobblyBinBoy... (yup, I was talking to you, but you already knew that. Didnt you?!)

B

[Guest absolutezero]

Oh, I see...

Before the election, we were going to be laughing on the other side of our faces, when NuLabia got back in.. yadda yadda...

NOW, we'll be laughing on the other side of our faces (at some future date,) because that DIDN'T happen.

Blow me, you've got a lot of time to think up rubbish to post, in between physics lessons, haven't you?!

FWIW, I think this current arrangement is cool. The worst possible option would have been the Tories in with a majority, getting all the blame for cutting out all the public sector non-jobs and benefit-swilling chavs, and then some other mob (I know you claim you ain't Labour, so I won't fall into the trap of allowing that as a diversion,) getting back in and pis$ing our kids' futures up the wall, to keep you in baggy-bum cords and "clever" hubris.

So, as far as I'm concerned this is a mighty fine coalition. The Tories and LibDems will BOTH play much harder ball, with someone else to share the blame with - and you and yours are still toast. Many of us thought the Tories might throw the election, because they didn't want to have to clear up Brown's steaming turds, but this way everyone has won (well, everyone except said benefit-swilling chavs and public sector troughers, but I hear no crocodile tears for them. Anywhere. Except of course in Chateau Self-Pity)

Maybe that's why you've been rather quieter on here recently; could it be you've realised that you now have to demonstrate your worth, by some hard work (you know, the stuff that's "work" - and sometimes "hard" as well) like a private sector employee, and also realise that ol' sense of mega-entitlement ain't worth diddlysquat anymore?!

No. I was banished actually.

My work rate hasn't changed. If anything I do less since year 11 have left.

Works for me, KnobblyBinBoy... (yup, I was talking to you, but you already knew that. Didnt you?!)

B

It's a shame for you isn't it?

Maybe one day you'll grow up.

[Guest DestroyBrown]

The below forums should be of interest to HPCers - loads of posts on CGT.

http://www.landlordz...display.php?f=7

MT, that post which you quoted makes my blood boil.

It's basically a rant from a very greedy, very selfish old *****.

"Oh but if values don't go up, I'll scream and scream and scream. My MP should hear about this!!"

If your MP has a modicum of sense, he'll tell you to feck off and stop moaning.

Can we all register on that forum and put these disgusting excuses for human beings, straight?

Edited May 20, 2010 by DestroyBrown

[dredwerker]

Of course expenses can be offset against tax - but they have to be genuine expenses that there is no way to avoid. E.g. If you provide your own tools for work, then you can claim the tax back. If you have to launder your work overalls at home, you can claim a laundry allowance. If you have to have professional indemnity insurance, or some other special certificate e.g. Gas fitting CORGI certificate) you can claim the cost of that.

You can't claim the cost of discretionary things. If you commute to work, you can't claim the cost of that, as you choose to commute - instead of walk or live closer to work.

With the exception of the 18% CGT rate, there aren't really any genuine tax breaks for BTL, and possibly the 'wear and tear' allowance - but it's not much of a break as it has to cover all the costs such as furniture, redecorating and appliance replacement/maintenance.

I doubt commuting is that discretionary. If you think about London and people commuting there - its to be able to pay the insane prices in their local area. Its not much of a choice. Also if you are window cleaner I bet you get the tax back on your travel, thats a choice - you could just wash your own windows - its discretionary. In Australia they let you claim taxes back for suit dry cleaning just for your normal office worker etc.. (no business)

[dredwerker]

Also did you see this article on taxation of flippers - its quite good sport reading that Landlord Zone.

Taxation of Flippers

Taxman Chases Property Flippers For A Share Of The Profits

Property flippers who have not paid tax on their profits are under scrutiny by HM Revenue and Customs.

Property flipping is buying a home cheaply and then doing the place up and quickly selling for a profit.

Many homeowners climb the property ladder by flipping their homes to reinvest the profits to buy a larger home.

[moonriver]

Taxation of Flippers

Taxman Chases Property Flippers For A Share Of The Profits

"Homeowners – for example, those appearing on popular TV programmes like Sarah Beeny's Property Ladder and Kevin McCloud's Grand Designs – who buy with the intention of developing or refurbishing to add value and then move on are classed as running a property trading business by the taxman."

Well I guess anyone appearing on those tv flipping programmes will be easy targets for the tax office to check up on. Surely none of them would be foolish enough to not disclose their profits to the tax office, would they?

[The Masked Tulip]

http://www.witneygazette.co.uk/business/8174081.Capital_gains_tax_changes/

Chris Mundy, tax specialist at Grant Thornton’s Oxford office, said: “We are still very much in the land of guessing here, since there have been no firm announcements, but the new Government has said the tax will come in. Exactly how, and more importantly, when, we don’t know yet.

“It could come in from the date of the Budget, June 22, or it could be from April next year.”

It could even be backdated, so that no one can dodge it. Nor do we know yet who exactly will pay the increased tax. Will it only be 50 per cent for those paying the equivalent rate of income tax, or will those of of us paying basic rate income tax pay that rate too, if we sell property or shares?

All that is certain is that sooner or later, most of the second homes dotted around the county, many of them belonging to London people who definitely qualify for higher-rate income tax and some paying the new 50 per cent rate, will attract the higher tax when sold.

Mr Mundy said: “In the short term it might affect the Oxfordshire property market as people jostle to sell before the increase, thus increasing the supply side. In the long-term it could spell the reverse.

“But of course, if the tax comes in next month, there will be hardly any time for the short-term anyway.”

Lucian Cook, of Savills Residential Research, said: “Investors looking to rationalise or reorganise their property portfolio, particularly those who have already seen good capital growth, could avoid a hefty tax burden by disposing of their asset before April 2011.

“This would include those who have bought investment property as a pension pot; some of whom may now be tempted to sell and invest in other asset classes.”

He added: “Bringing forward sales of this type could distort some local markets at a time when the early-stage recovery is already looking fragile.”

And what of the buy-to-let market, which is strong in Oxford?

Darren Hazell, of residential lettings business The Letting Centre (TLC) in Headington, said: “We have already seen an increase in landlords wishing to sell their properties.

He added: “From the landlord’s point of view, it’s painful enough having to pay 18 per cent capital gains when you sell a property, let alone 40 per cent.

“This will not do a lot for the property game here, but I suppose in the long run landlords should think of the income and of eventual inhertitance tax liability rather than capital gains.”

But a word of warning to people thinking of selling before the CGT increase. If you sell your property, pay the CGT, and then die, your estate will then also be liable to inheritance tax — whereas if you had not sold, only inheritance tax would be due.

[The Masked Tulip]

The wealthy middle classes will never stop whining

This country's most well-off are upset at the loss of their lucrative tax breaks. Why am I struggling to feel any sympathy?

http://www.guardian.co.uk/commentisfree/2010/may/20/deborah-orr-middle-class

They are typically characterised as doughty and stoical, quietly getting on with the business of "being good citizens" and "doing the right thing". Actually, they never stop whining, or at least their self-appointed guardians in the press never stop whining. Who are they? They are the faux middle class, who never believe they are actually part of the wealthy elite, because they always know people who are considerably more wealthy than they are.

Prior to the financial crash, they were already unhappy, keen to explain to anyone who would listen – a surprisingly large number, it seems – that a pair of professional salaries was barely enough to deliver their birthright, which was a home in a well-appointed part of London, large enough to accommodate a live-in servant; a second home in the countryside, but within easy four-wheel driving distance; private schools for the children; and just one summer and one winter holiday. Ponies were beyond their means. Life was so unfair.

Now, upset by the snatching away of their promised inheritance tax freebies, and positively incensed by adoption of crazy Liberal Democrat ideas suggesting that unearned income might fairly be taxed at a similar rate to earned income, they are at it again. Who can blame them? The electorate were warned if they voted Lib Dem they would get Cameron, or, less accurately as it turned out, that if they voted Lib Dem they would get Brown. But nobody said that if they voted Cameron, they would get Clegg. Worse, nobody warned anybody that Cameron would "get" Clegg, and "get" quite a few of his policies too.

Particularly vexing, apparently, is the possibility that capital gains tax on the sale of their second homes could soon be charged at a similar rate to income tax. Now, I don't quite understand why people imagine that time and effort spent on working is more taxable than time and effort spent on having a lovely time at the weekend. But I do understand that the various perverse incentives that inflated the property market were the very things that made it so expensive to purchase that home in a well-appointed part of London – and that second home in the countryside to begin with.

Reform of second-home capital gains tax is not only important because it is more socially just. It is also important because it will help to rebalance an economy that became over-dependent on the housing bubble. I'd slap CGT on first homes myself, and put an end to the property flipping that has become so popular even with CGT on second homes a snip at 18% – and not just among those stalwarts of the faux middle class, members of parliament. But that's just me.

Full article at above link.